Tesla Has Found Some Government Regulations It Can Get Behind

Photo: Dodge

Tesla doesn’t like government regulations, until it does, the kind of stance every automaker takes depending on their particular interests, and also depending on who is president. In other words, automakers are governed by self-interest. On Sunday, the National Highway Traffic Safety Administration said it would be more than doubling penalties on many cars that don’t comply with fuel efficiency requirements, government action that Tesla had previously asked for.

Reuters says that the penalties will be going up from $5.50 to $14 for cars in the 2019-2021 model years, money that is multiplied by every tenth of a mile per gallon over the limit per noncompliant car that automakers sell. That could add up to tens or even hundreds of millions of dollars lost for the worst offenders, namely, Stellantis, and also be a boon to Tesla, not only because the penalties are a nonissue given that Tesla makes EVs, but also because Tesla has a somewhat lucrative sideline selling credits to get automakers in compliance.

NHTSA’s final rule, which takes effect 60 days after it is published, reinstated the higher penalties and boosted them further for the 2022 model year. The agency has not collected penalties for 2019 to 2021 model years while the issue was under review and is the subject of court challenges.

The final rule was signed on Thursday by NHTSA’s top official, Steven Cliff, ahead of its formal publication.

[…]

NHTSA estimated that for the 2019 model year, automakers would owe $294 million at the new rate, up from $115.4 million under the prior rate.

NHTSA added automakers that made plans for 2019 through 2021 “thinking that penalties would not increase did so at their own risk.”

This all started years ago, when, in the waning days of the Obama administration, Congress said that federal civil penalties had to be adjusted for inflation, which meant that the penalty for violating fuel economy standards also had to rise for the first time since 1997. Except then Trump was elected, and his administration spent four years trying to roll back fuel economy standards, and putting off this particular one, too.

This is also, of course, still somewhat of a drop in the bucket for automakers, given that Stellantis earned $15.2 billion in net profit last year, while Reuters says that Stellantis thinks its penalties under the new rules will amount to around $572 million at most. Dodge Challengers will never die.